DFID Changes Mind on Fibre Optic for Montserrat
DFID has had a change of heart over its verbal and written commitment to fund up to 97% of a fibre optic project to connect Montserrat to the Eastern Caribbean subsea fibre network.
Hon. Premier Donaldson Romeo on Tuesday confirmed that during the recent visit of Deputy Head of Department for International Development (DFID) Indranil Chakrabarti, it was expressed that Montserrat now needed to seek private sector partners to execute the project to completion.
“I’ve had a number of discussions about fibre optics this week with the relevant stakeholders here on the island. It’s not really for me to say what the next steps are; it’s with the relevant stakeholders here to set those out but, as with the broader reconstruction effort, it will require a joint government, private sector potentially.” That was Chakrabarti’s statement to the press two weeks ago and this, the premier said is not what DFID had agreed to in 2016.
Romeo said the work to get Montserrat connected via fibre optic has been ongoing for seven years. The business case written by DFID notes that fibre optic is a crucial step for Montserrat’s economic development and a necessary resiliency move to protect the island’s communications after a disaster.
During the recent passing of Hurricane Irma, the island suffered loss of connectivity due to damage sustained on other islands which provide internet via microwave. During Hurricane Maria, connectivity was lost by one of the telecommunication providers after the microwave dishes and network suffered severe damage.
The premier said he plans to bring this development to the attention of his fellow Overseas Territories colleagues when they meet in Florida for Pre-Joint Ministerial Council next week. Premier Romeo added that now several OTs including Tortola and Anguilla are in need of development support after the devastation caused by the hurricanes, it was necessary to approach DFID together.
Romeo expressed disappointment that DFID had reneged on its commitment and was now asking Montserrat to seek co-financing for the project, which had been ruled out in the business case due to market barriers.
In January 2017, Teleography reported that “every property on Montserrat should be connectable via superfast broadband by the end of 2018.”
According to the Business Case which is available for viewing online, in 2012, GoM, using its EDF9 finance, commissioned Terabit Consulting International to undertake a technical, economic, and financial appraisal to develop the evidence base for the reinstallation of the fibre optic cable and development of a vibrant Information Communication Technology (ICT) sector. The appraisal and subsequent expressions of interest indicated that approximately £4.94m will be required to implement a dual fibre optic link between Montserrat and St Kitts and Nevis and Montserrat and Antigua. GoM does not have all the funding required to fully implement the project. GoM allocated £0.15m from the EDF 9 & 10 as their contribution to cover consultancy costs for the project and asked DFID to contribute £4.94m for the physical laying of the sub-sea cable.
“The UK will provide up to £4.94 million to implement a fibre optic dual link between Montserrat and St Kitts and Nevis and Montserrat and Antigua. The Government of Montserrat (GoM) will contribute £150,000 from its European Development Fund (EDF) 9 & 10 allocation.[2£60,068 (40%) has been allocated to complete consultancies and the remainder will be allocated to terrestrial fibre optic installations that may be required to connect GoM offices via an underground network. The support is made up of £4.84m in CDEL and £0.1m in RDEL, to be disbursed over a three year period 2016 – 2018. The private sector would contribute £50,955 annually to fully cover operating and maintenance costs over the life of the cable.
“Approximately 50% of the GoM EDF 9 and 10 allocated EC$0.3m (£0.075m) has already been spent on consultancy costs. The remaining funds will also be used for specialist and consultancy costs.
 Both existing ICT service providers on-island, FLOWare prepared to fully support the annual operating and maintenance costs of the fibre optic cable. Both companies have staff and insurance policies to cover service difficulties, if experienced, over the life of the project (assumed to be a minimum of 25 years).
“Montserrat was connected to the Eastern Caribbean Fibre Network until 1997, when the evacuation of Plymouth forced the provider to abandon their headquarters and terminate the subsea fibre connection. The current method of connecting to the international telecommunications network is via a microwave link between Montserrat and Antigua. The microwave network is unreliable, with network outage occurring during storms, either on Montserrat or on Antigua, and expensive to repair. Repairs can take 2 to 3 days. It remains susceptible to future damage from extreme weather events, which if severe, can completely disable Montserrat’s international connectivity.
“Montserrat has remained without international fibre optic connectivity since 1997, and is one of the last Caribbean states or territories without it. This demonstrates that the private sector perceives the risk/return profile of any Montserrat Submarine Cable Project to be unworkable without some form of public support. This also represents a significant area of market failure and the justification for UK public sector intervention.
“The fragility of the existing Montserratian telecommunications network has been identified as the island’s single biggest weakness in the event of regional hurricane activity. The goal of Montserrat’s undersea and terrestrial network development should be to eliminate uncertainty surrounding the country’s ICT development and provide future proof broadband capacity as a cornerstone of growth and access, coupled with the island’s strategy to open sea and air access and promote macro-economic growth. International investors, including retirees, will have the confidence that they will be able to remain on island with full ICT service availability.
“Given the small size of the market in Montserrat (less than 5000 residents and 2500 households), the private sector has not been very aggressive in rolling out new broadband services. Both the current telecommunications providers have indicated that the potential financial return on investment cannot justify the level of capital investment required to re-establish the fibre optic link. However, other competing providers have recognised the wider potential to service Montserrat with broadband-based services. A 2012 study commissioned by GoM highlighted examples of where the lack of affordable, reliable and abundant international bandwidth was likely to continue to serve as a deterrent to future investment and could also devalue existing investments in the public and private sectors (Terabit Consulting, 2012).